Following an update from FTX debtors on the $5.5 billion uncovered by administrators during an investigation, former FTX CEO Sam Bankman-Fried (SBF) took to Twitter to share a blog post from his newsletter. Substack. SBF claimed that the filing released by litigation firm Sullivan & Cromwell is “extremely misleading” and that FTX US is and “always has been” solvent.
SBF claims misrepresentation by litigation firm, Twitter critics doubt solvency
Sam Bankman-Fried (SBF) provides additional information in response to the recent press release and 20-page presentation document issued by the current FTX debtors and restructuring administrators. The press release reported that investigators found $5.5 billion in liquid assets. In response, SBF published a new blog in their Substack newsletter and fixed on Twitter, “FTX US is solvent, as it always has been.” The blog post echoes this statement and asserts the discrepancies between the Sullivan & Cromwell (S&C) reports and the SBF spreadsheet.
It disputes the filing’s claim that FTX US is “deficit” and maintains that FTX US is not insolvent. “S&C claims that FTX US is in deficit,” SBF said in his latest blog post. “That statement is false. According to S&C’s own data provided in the same court filing, FTX US had approximately $609 million in assets ($428 million in bank accounts, plus $181 million in tokens) supporting approximately $199 million in customer balances. FTX US was solvent when it was transferred to S&C, and it almost certainly remains solvent today.”
Despite SBF’s claims, several people on social media mocked the FTX co-founder, specifically criticizing his Excel spreadsheet. “Brother wrote a couple of numbers in 5 minutes thinking it will be his get out of jail free card,” one person tweeted in response to the latest SBF blog post. “Nice excel sheet that a 5 year old could do, LOL, it means nothing. Somebody shut this guy up forever”, another person wrote. SBF’s claims were met with skepticism and his statements did not appear to be convincing to many.
Missing funds, lack of auto settlement issues, and FTX’s ‘questionable redemption system in the US’ remain unaddressed by former FTX CEO
a number of people disputed why SBF did not comment on the $10 billion in missing funding and, once again, their blog post did not address the allegations made in the filing. For example, following SBF’s latest blog post, Bitmex co-founder Arthur Hayes criticized the FTX co-founder for failing to address the lack of automatic settlement associated with Alameda Research. The latest filing by FTX debtors claims that “Alameda Research and a small group of individuals had the ability to remove assets from the exchange.” Furthermore, the removal of funds was never recorded on the company’s ledger, and the funds were allegedly derived from FTX exchange clients.
SBF did not address that specific issue at all. It is absent from your argument against the Sullivan & Cromwell filing. People on Twitter mentioned this to SBF in other Twitter threads on the subject, since SBF’s tweets are set to “private” mode and cannot be commented on. “This does not explain the embezzlement allegations your colleagues have pleaded guilty to,” one person on Twitter. tweeted in response to SBF’s latest claims. A person told the media that SBF’s claims appear to be intentional “misdirection” and “potentially for legal/defense purposes.”
It’s safe to say that Bankman-Fried’s claims and recent blog posts aren’t taken seriously, and his Excel spreadsheet method doesn’t convince the general public. Some people wondered if SBF was “allegedly tweeting against the advice of legal counsel”. The latest blog post was not much different from the last post the SBF wrote, as neither explains a series of issues raised by Bankman-Fried co-workers: former Alameda CEO Caroline Ellison and FTX co-founder Gary Wang. In addition, evidence has emerged about how “traders may have used a questionable FTX US redemption system” for assets bridged by Solana.
Conor Rogan, a Coinbase director who frequently tweets about on-chain activities, said this redemption scheme could complicate the bankruptcy process. “From November 9 until withdrawals stopped a few days later, traders may have used a questionable FTX US redemption system to funnel (tens of millions) off the exchange,” Rogan saying. “This could complicate bankruptcy proceedings and further call into question FTX-FTXUS’ separation claims,” he added. Rogan discussed a synthetic bitcoin based on Solana (BTC) token named “solete (soBTC)” which snapped its peg when FTX’s troubles went up in flames. Despite the financial issues, FTX US still processed Sollet redemptions on a 1:1 basis.
Redemptions still occurred while Sollet was Commerce for much less than BTC‘s spot price, and Rogan believes that “toxic swaps” or “unsupported swaps ETH Y BTC” led to the potential loss of more than $40 million. “FTX US would presumably have 1,700 reais BTCinstead of 1,700 soBTC which is worth almost zero on the open market today”, Rogan tweeted. The chain investigator indicated, however, that the evidence was his own “speculative findings based on FTX US Solana management’s investigation and discussions with members of the Solana community.” In particular, following Rogan’s Twitter thread, SBF decided to respond to the claims made.
“I’m pretty sure FTX US’s excess cash on hand is much larger than the size of the asset issue involved to the extent there is one,” SBF wrote in reply to Rogan’s statements on Twitter.
Once again, SBF’s comment on the sollet (soBTC) problem was met with skepticism Y criticism shortly after he posted the tweet. You just said they were solvent. Now are you ‘quite confident’?” a person I ask the co-founder of FTX. “I’m pretty sure he’s going to spend a lot of time in federal prison,” another individual tweeted. Rogan’s Twitter thread and SBF’s response further highlight that people don’t seem to be accepting the former FTX CEO’s statements. “Nobody believes anything you say and never will”, a person answered to SBF’s sollet comment on Twitter.
What do you think about Sam Bankman-Fried’s claims about the solvency of FTX US and the allegations of embezzlement and underfunding? Leave your comments below.
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